Belgium’s Federal Council of Ministers has approved royal decrees to reform the investment deduction regime, introducing three categories of investments that are eligible for additional tax deductions, which go into force on 1 January 2025.
These include a basic deduction of 10% for small companies. Previously, small companies and eligible individuals could claim an ordinary investment deduction at the rate of 8%.
There is also ‘the increased thematic deduction’ of 30% for large companies and 40% for small companies and individuals. Previously, several specific investment deductions were applied for companies. To qualify for the investment deduction, investments must align with one of four themes: investments in renewables and efficient energy use, carbon-free transport, eco-friendly investments, and supporting digital tools. The lists of eligible investments are set by Royal Decree and periodically updated.
The decrees also introduce a technology deduction of 13.5%, which is accompanied by a 20.5% “spread” deduction. The new technology deduction will replace the investment deduction for patents and environment-friendly investments in research and development.
Regardless of the categories of investments, an investment is only eligible for a single deduction.
The royal decrees have been sent to the Council of State for review and are expected to be published soon.
